Economy
Chicago Business Barometer Drops to Five-Year Low
Written by Sandy Williams
January 31, 2020
The Chicago Business Barometer, a leading indicator of Midwest manufacturing, dropped to its lowest level since December 2014, said MNI Indicators. The PMI posted a reading of 42.9 in January following two months of gains. The three-month average dipped to 45.9. Any reading below 50 indicates contraction.
New orders fell 6.1 points to 41.5 and production dropped 3.8 points to 42.7, its lowest level since July 2019. Order backlogs were at a four-year low, plummeting 10.2 points to 34.6.
The Inventory Index fell to 40.2 for its lowest level since May 2016 and its sixth consecutive month in contraction.
Supplier deliveries dipped to 53.3, but remained above the 50 mark. Factory gate prices were down 2.1 points to 56.1 for a two-month low.
“Manufacturing is still very weak, but it appears not to be weakening further on a national scale,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
When asked if the signing of the USMCA agreement would improve supplier lines, 60 percent of survey participants said there would be no improvement at all and 40 percent expected little change.
Asked about planned business activity for the year, 50 percent expect growth below 5 percent, 43 percent forecast 5 to 10 percent growth and 7 percent predict growth above 10 percent.
The Chicago Barometer has been among the weakest of the regional manufacturing surveys. The ISM Manufacturing Index, due to be released next week, is expected to show improvement from December’s reading of 47.2 percent.
Below is a graph showing the history of The Chicago Business Barometer. You will need to view the graph on our website to use its interactive features; you can do so by clicking here. If you need assistance logging in to or navigating the website, please contact us at info@SteelMarketUpdate.com.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Steel groups welcome passage of budget bill
Steel trade groups praised the passage of the Big Beautiful Bill (BBB) in Congress on Thursday.
Industry groups praise Senate for passing tax and budget bill
The Steel Manufacturers Association and the American Iron and Steel Institute applauded the tax provisions included in the Senate's tax and budget reconciliation bill.
Chicago PMI dips 0.1 points in June
The Chicago Purchasing Managers Index (PMI) slipped 0.1 points to 40.4 points, in June.
Multi-family pullback drives housing starts to 5-year low in May
US housing starts tumbled in May to a five-year low, according to figures recently released by the US Census Bureau.
Architecture firms still struggling, ABI data shows
Architecture firms reported a modest improvement in billings through May, yet business conditions remained soft, according to the latest Architecture Billings Index (ABI) release from the American Institute of Architects (AIA) and Deltek.